Fiscal Year 1999 (First Half)

May 19, 1999

The Honorable Robert Pitofsky
Chairman
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580

Dear Chairman Pitofsky:

The attached report covers the Office of Inspector General's (OIG) activities for the first half of fiscal year 1999, and is submitted according to Section 5 of the Inspector General Act of 1978, as amended. The Act requires that you submit this report, with your Report of Final Action, to the appropriate Congressional committees within 30 days after receipt of the report.

During this reporting period, the OIG completed its second financial statement audit of the Federal Trade Commission. I am pleased to report that the agency received an "unqualified opinion," the highest opinion provided by independent auditors. Based on this audit work, the OIG issued a management letter that contained recommendations on how to improve the agency's financial management program. The OIG also issued an investigative alert detailing security concerns surrounding the agency's e-mail system, closed four investigations, performed a peer review of another Office of Inspector General and initiated an audit survey of the systems and processes used by FTC staff to ensure compliance with non-monetary provisions of FTC administrative orders.

As in the past, management has been responsive in attempting to address all OIG recommendations. I appreciate management's support, and I look forward to working with you in our ongoing efforts to promote economy and efficiency in agency programs.

Sincerely,

Frederick J. Zirkel
Inspector General

TABLE OF CONTENTS

TRANSMITTAL

INTRODUCTION

AUDIT ACTIVITIES

Completed Audits/Alerts
Summary of Findings for Audit Reports Issued During the Current Period
Audits in Which Field Work is in Process

INVESTIGATIVE ACTIVITIES

Investigative Summary
Investigations Closed During the Current Period
Matters Referred for Prosecution

OTHER ACTIVITIES

Significant Management Decisions
Access to Information
Internet Access
Audit Resolution
Review of Legislation
Contacting the Office of Inspector General

TABLES

Table I: Summary of Inspector General Reporting Requirements
Table II: Inspector General Issued Reports With Questioned Costs
Table III: Inspector General Issued Reports With Recommendations That Funds Be Put To Better Use

INTRODUCTION

The Federal Trade Commission (FTC) seeks to assure that the nation's markets are competitive, efficient, and free from undue restrictions. The FTC also seeks to improve the operation of the marketplace by ending unfair and deceptive practices, with emphasis on those practices that might unreasonably restrict or inhibit the free exercise of informed choice by consumers. The FTC relies on economic analysis to support its law enforcement efforts and to contribute to the economic policy deliberations of Congress, the Executive Branch and the public.

To aid the FTC in accomplishing its consumer protection and antitrust missions, the Office of Inspector General (OIG) was provided five work years and a budget of $548,100 for fiscal year 1999.

AUDIT ACTIVITIES

For this semiannual period, the OIG audited the FTC's FY 1998 financial statements and issued a management letter containing financial-related findings and recommendations resulting from the audit. The OIG also issued an investigative alert on electronic mail (E-Mail) access vulnerabilities. In addition, the OIG began fieldwork on a survey of agency enforcement of non-monetary FTC administrative orders. Detailed information about these activities is provided below.

Completed Audits/Alerts

Audit Report Number
Subject of Audit
AR 99-041

Audit of the Federal Trade Commission's Financial Statements for the Fiscal Year Ending September 30, 1998

AR 99-041A Management Letter to FY 1998 Financial Statements
IA 99-07 Investigative Alert: E-Mail Vulnerabilities

Summary of Findings for Audit Reports Issued During the Current Period

In AR 99-041, Federal Trade Commission Audited Financial Statements for Fiscal Year 1998, the objective was to determine whether the agency's financial statements present fairly the financial position of the agency. The statements audited were the Balance Sheets as of September 30, 1998 and 1997, and the related Statements of Net Cost, Statements of Changes in Net Position, Statements of Budgetary Resources, Statements of Financing, and Statements of Custodial Activity for the years then ended. This is the second consecutive year that the FTC has undertaken a financial statement audit. The agency again received an unqualified opinion, the highest opinion available from independent auditors.

Beginning in FY 1999, performance measures are to be included in the financial statement package. This inclusion will assist agency management to determine its success in meeting its strategic objectives under the Government Performance and Results Act and better enable agency stakeholders and the general public to relate audited costs to agency accomplishments.

Even without performance measures, the FY 1998 audited statements present a substantial amount of information about the FTC. For example, agency assets are comprised primarily of cash, and they remained relatively level in FY 1998 at approximately $100 million, while liabilities decreased 19 percent over the prior year to $67 million. Virtually all of this decrease in liabilities resulted from reductions in the amount of un-disbursed redress funds held by agency contractors.

On the revenue side, the Statements of Net Cost and Statements of Budgetary Resources show that the agency is largely self-funded due to Hart-Scott-Rodino (HSR) pre-merger fees collected from parties seeking merger approval. The FTC and the Department of Justice review all merger applications meeting certain thresholds for potential anticompetitive effects. All fees are collected by the FTC, then are divided evenly between the two agencies. In FY 1998, total fee collections increased approximately 25 percent to $201.6 million: $100.8 million was transferred to DOJ; $70 million was placed in the FTC's FY1998 appropriation account for current year use, with the remaining $30.8 million set aside for future use. When the $70 million is combined with $18.2 million in carryover fees from the prior year, this earned revenue funded over 80 percent of agency operations.

The Statements of Net Cost are designed to report the gross and net costs of providing government services. In FY 1998, the FTC's net cost of operations was $8.7 million. When amounts returned to Treasury in the form of non-exchange revenue as a result of FTC judgment collections are factored in, the agency actually generated a surplus of $6.9 million in FY 98.

The Statements of Custodial Activity (CAS) present the financial results of the FTC's enforcement activities for the years under review. In its consumer protection mission, much of the agency's resources are devoted to identifying and stopping consumer fraud. The CAS shows that the FTC won court-ordered judgments totaling $55 million against defendants in consumer fraud cases. Collections against judgments totaled $17.8 million in FY 1998, while disbursements to consumers increased nearly five-fold over FY 1997. During fiscal years 1997 and 1998, the agency collected a total of $40 million for consumer redress, and distributed $25 million directly to consumers. Much of this difference is still on hand with redress contractors awaiting distribution, or has been disgorged to the U.S. Treasury. Agency collections of civil monetary penalties against individuals and firms (for both its antitrust and consumer protection missions) doubled to $8.8 million in FY 1998.

In the OIG's Management Letter, we followed-up on agency actions to address a number of findings made in the prior year audit. The current year audit also identified some additional findings. The agency made substantial progress in addressing prior year findings. For example, prompt payment interest penalties are down 56 percent to $7,170; actions taken by the agency's redress administration office (RAO) will result in an estimated $32,000 in additional interest earnings to help offset contractor fees, leaving more funds for consumers; systems to record civil monetary judgments now accurately reflect agency enforcement results; and changes made to the bad debt referral process have increased the percentage of bad debts referred for collection to the Department of Treasury's Debt Management Service.

On the other hand, staff continue to submit travel documentation (orders, vouchers) late, and 41 percent of the undelivered orders identified by the OIG as invalid on September 30, 1997 remained on the books as of September 30, 1998. These outcomes effect the integrity of the agency's financial accounting systems used by managers to manage the agency. When brought to the attention of the CFO, he outlined detailed steps that his office would take to correct these deficiencies, including targeting repeat offenders and offices for training.

The audit also identified an additional $190,000(1) in funds that could be put to better use. This amount results from the ineffective management of undelivered orders and from the under reporting of taxable wages. The FTC has contracted with the Department of Interior's Administrative Service Center (ASC) to perform payroll and vendor payment functions. The OIG found that in a systems changeover occurring during 1998, a taxable benefit was not included on 135 federal employee W-2 forms prepared by ASC for the last four months of the 1998 calendar year. Eleven departments and/or agencies were affected by this accounting error.

The OIG also identified weaknesses in the agency's redress program that could result in fraudulent claims being paid to contractors without the knowledge of the FTC. The OIG found that the Redress Administration Office could not verify claimant information in over half of the cases we reviewed because the agency was not in control of the original claimant list. For example, fictitious consumer names could be added to legitimate claimant lists by FTC's redress contractor employees which could not be disputed by the FTC because the original claimant list was not within the agency. The OIG believes this to be a serious control weakness and is planning to review the claimant control process in order to determine what additional controls might be needed.

In IA 99-07, Investigative Alert: E-Mail Vulnerabilities, the review objective was to identify vulnerabilities relating to E-Mail access at the FTC, and to recommend steps to eliminate or reduce these vulnerabilities. As a result of our findings and management actions to correct them, the Commission significantly reduced its vulnerability to unauthorized E-Mail access.

The OIG review identified weaknesses that would enable current and former employees including consultants, contractors and students to access private and group accounts belonging to other current employees. Current employees were vulnerable because, as the OIG found, 40 percent did not password protect their E-Mail accounts. With remote access to the agency's E-Mail server and a few keystrokes, unprotected accounts could be easily opened and the contents read. Many unprotected accounts belong to, and are used by, attorneys working on nonpublic investigations. Further, access to opened mail by an unauthorized third party could be accomplished without the knowledge of the intended recipient.

The OIG alerted agency management to vulnerabilities as they were discovered. Management took a number of immediate steps to reduce or eliminate many of these vulnerabilities, including disabling accounts belonging to over 200 former employees, changing remote access procedures (i.e., routine changing of "gateway" passwords) to enhance security, and emphasizing to staff (in agency-wide memoranda) the importance of password protecting E-Mail accounts and the potential effects of failing to do so. When a subsequent OIG sample still revealed less than 100 percent compliance, management individually contacted staff with unprotected accounts. Individuals who could not be immediately contacted were assigned a new password by management, requiring they contact agency systems managers before using their E-Mail again. At the conclusion of these steps, ITM certified to the OIG that all FTC accounts were protected.

Audits in Which Field Work is in Process

Audit Report Number
Subject of Audit
XXXX-X

Survey of the Systems Used by the Federal Trade Commission to Seek Compliance with FTC Orders
The survey objective is to gain an understanding into how the FTC (specifically, the Bureaus of Competition and Consumer Protection) establishes and enforces compliance with its administrative orders. The OIG sampled orders issued by the bureaus dating back to 1990 and is in the process of evaluating the methodology used to assess compliance . We are also reviewing agency systems for capturing performance data relating to compliance in preparation of GPRA reporting requirements.

INVESTIGATIVE ACTIVITIES

The Inspector General is authorized by the IG Act to receive and investigate allegations of fraud, waste and abuse occurring within FTC programs and operations. Matters of possible wrongdoing come to the OIG in the form of allegations or complaints from a variety of sources, including FTC employees, other government agencies and the general public.

Reported incidents of possible fraud, waste and abuse might give rise to administrative, civil or criminal investigations. OIG investigations might also be initiated based on the possibility of wrongdoing by firms or individuals outside the agency when there is some information that indicates they are or were involved in activities intended to compromise the outcome of a particular agency enforcement action. Because this kind of wrongdoing strikes at the integrity of the FTC's consumer protection and antitrust law enforcement missions, the OIG places a high priority on investigating it.

In conducting investigations, the OIG has continued to seek assistance from, and worked jointly with, other law enforcement agencies, including the Federal Bureau of Investigation (FBI), the Postal Inspection Service, the U.S. Secret Service, the Internal Revenue Service (IRS), other OIGs, state agencies and local police departments.

Investigative Summary

During this reporting period the OIG received 61 complaints of possible wrongdoing. Of the 61 complaints, a total of 47 related to matters that the OIG determined were the responsibility of FTC program components, FTC management or the agency's ethics official. Consequently, the OIG referred these matters to appropriate agency officials for disposition. A relatively large number of the 47 complaints (11) were from consumers who focused on a single FTC enforcement case not within the purview of the OIG.

Of the 14 remaining complaints, the OIG referred four (4) of them to other government agencies as they contained allegations within their authorities, to include the FBI, the Department of Education OIG, the Pension Benefit Guaranty Corporation's OIG, the Securities and Exchange Commission's Enforcement Division, and the IRS. Moreover, in these same four (4) matters, the OIG also provided investigative assistance to FTC management and consulted with a federal prosecutor named by a complainant. Finally, of the 10 complaints left, the OIG opened five (5) new investigations and closed the five (5) remaining complaints without taking any action.

Following is a summary of the OIG's investigative activities for the six-month period ending March 31, 1999. As referenced, the OIG opened five (5) new investigations during this reporting period, while it also closed four (4) cases:

Cases pending as of September 30, 1998
1
Plus: New cases
+ 5
Less: Cases closed
- 4
Cases pending as of March 31, 1999
2

Investigations Closed During the Current Period

Obstructions & Unauthorized Disclosures (2)

1. A criminal obstruction investigation involving FTC civil law enforcement proceedings was closed during this period. The investigation, opened in a prior reporting period, was initiated when the OIG received information that an individual, while working for a law firm, had intentionally destroyed damaging client documents which had been sought by FTC law enforcement staff. The allegations, if true, indicated a possible criminal obstruction of one or more FTC civil law enforcement proceedings.

The OIG referred the matter to the United States Attorney's Office in Washington, DC. The OIG also sought and received investigative assistance from the FBI and consulted with Main DOJ and State Department officials on international issues related to locating and interviewing a key witness in the case. In addition, grand jury process was used to obtain documents pertinent to the investigative team's objectives. Based on a review of the evidence developed by investigators, and given various witness statements, the AUSA declined to pursue criminal prosecution. As a result, the case was closed.

2. During this reporting period the OIG closed another investigation relating to unauthorized disclosure of information which was opened earlier in the period. The case was initiated when management provided the OIG with information indicating that an unknown FTC employee might have provided a former FTC attorney, now in private law practice, with nonpublic FTC information about a premerger notification matter.

As the OIG found no evidence that any employee had intentionally passed on any nonpublic information, the case was closed. However, based on discussions between the OIG and bureau management, a staff memorandum was issued reiterating earlier FTC policy statements and providing additional guidance to premerger staff on when and how disclosures of investigations of announced mergers and related facts should take place.

Employee Misconduct and Ethical Violations (1)

The OIG closed a third case during this reporting period which was opened earlier in the period based on receipt of an anonymous mailing. The letter alleged that an attorney in private practice had been reported to the state bar for serious misconduct, possibly even fraud, for activities which occurred at the firm in which the person worked immediately prior to her being hired by the FTC. The anonymous allegation also stated that the person's FTC supervisor, upon becoming aware of the alleged wrongdoing after he hired the attorney, did nothing to address the problem.

The OIG opened an investigation after determining that the attorney applying for the FTC position did not reveal the alleged wrongdoing contained in the bar complaint. Accordingly, if there was evidence that the employee made false statements on government documents in furtherance of her being hired, such as not disclosing a termination for cause, then a criminal law violation might have occurred. Moreover, if there was any evidence that the FTC manager learned of the alleged improprieties after he hired the person, then there was also the possibility that the supervisor was derelict in not moving forward to take appropriate action.

During the investigation both the manager and the employee cooperated fully, and the OIG learned that the FTC attorney's former employer had, in fact, filed a bar complaint against her contemporaneous with her leaving the law firm to join the FTC. The charges related to the person's dealings while at the firm. As the OIG developed no evidence of a criminal law violation, including a false statement being made to the FTC, or of the manager trying to cover up any impropriety, the OIG closed the case.

As the OIG believes that it is just as important to protect employees against specious or uncorroborated allegations, as it is to identify employee wrongdoing, a referral was made to the agency's ethics official (i.e., the Designated Agency Ethics Official). This OIG referral recommended to the DAEO that additional advice and guidance concerning bar complaints made against prospective attorney employees be provided to FTC managers as a means of more effectively dealing with allegations which might otherwise come as a surprise (and embarrassment) to all parties affected, especially new employees.

Crimes Against the Government (1)

In another case closed during this reporting period, the OIG investigated an allegation that an individual, using a fictitious name, telephoned a businessman and falsely represented himself as an FTC law enforcement official, purportedly to extract proprietary information from the businessman. The complainant relied on voice recognition and a phone number within a particular area code to identify the caller as a business competitor of his with whom he had had a past encounter.

Impersonating a federal officer constitutes a criminal law violation (18 U.S.C. §912). In fact, the OIG, with FBI assistance, has previously investigated a case of false personation in which an individual, to extort money from businesses regulated by the FTC, falsely represented with credentials and FTC documents that he was an FTC law enforcement agent. This investigation led to an arrest, confession and a successful prosecution of the individual. As in that case, the prosecution of a false personation charge is often accompanied by a companion federal criminal law violation (e.g., extortion while impersonating a federal officer -- 18 U.S.C. §872).

Although the allegation in the present complaint did not result in any known financial loss, the OIG, nevertheless, conducted a preliminary investigation to attempt to develop some evidence to corroborate the allegation. The OIG has not, to date, been able to corroborate the allegation. Consequently, we have closed the case.

Matters Referred for Prosecution

During the current reporting period the OIG continued to work with a federal prosecutor on a case that had been referred for criminal prosecution during a prior reporting period. No new cases were referred for criminal prosecution, although the OIG did consult with federal prosecutors on several investigative matters.

OTHER ACTIVITIES

During this reporting period the OIG also allocated resources to activities other than conducting audits and investigations. These activities involved participating on Executive Council on Integrity and Efficiency (ECIE) committees and responding to Congressional, GAO and OMB requests for information.

PCIE/ECIE Activities -- The FTC/OIG completed a peer review of the Federal Labor Relations Authority, Office of Inspector General. The objectives of a peer review are to determine whether an effective internal quality control system has been established in the office, and established policies, procedures and applicable auditing standards are being followed.

Other Activities - The OIG seeks to continuously assist management and, whenever appropriate, to work in partnership with management to improve agency program operations. Along these lines, OIG staff participate in agency task forces in an advisory capacity, contributing expertise gained from approximately 50 audits, surveys and inspections performed since the office's establishment in 1989.

Specifically in this reporting period, OIG staff served on two agency-wide task forces: (i) the Government Performance and Results Act (GPRA) Committee, and (ii) the Check In, Check Out, and Moves (CICOM) Committee. The GPRA committee seeks to provide a central forum through which GPRA information, obtained from various sources in and outside the agency, can be disseminated, shared and discussed. The committee also continually updates and improves the FTC strategic and performance plans consistent with statutory mandates and program needs of the FTC.

OIG staff also served as an advisory member to the CICOM committee. This assignment seeks to tap OIG expertise developed as a result of numerous audits of agency systems relating to employee hirings and separations. While the OIG is not involved in setting policy, we issued written comments to agency proposals to amend check-in/check-out procedures during the current reporting period.

Significant Management Decisions

Section 5(a)(12) of the Inspector General Act requires that if the IG disagrees with any significant management decision, such disagreement must be reported in the semiannual report. Further, Section 5(a)(11) of the Act requires that any decision by management to change a significant resolved audit finding must also be disclosed in the semiannual report. For this reporting period there were no significant final management decisions made on which the IG disagreed, and management did not revise any earlier decision on an OIG audit recommendation.

Access to Information

The IG is to be provided with ready access to all agency records, information or assistance when conducting an investigation or audit. Section 6(b)(2) of the IG Act requires the IG to report to the agency head, without delay, if the IG believes that access to required information, records or assistance has been unreasonably refused, or otherwise has not been provided. A summary of each report submitted to the agency head in compliance with Section 6(b)(2) must be provided in the semiannual report in accordance with Section 5(a)(5) of the Act.

During this reporting period, the OIG did not encounter any problems in obtaining assistance or access to agency records. Consequently, no report was issued by the IG to the agency head in accordance with Section 6(b)(2) of the IG Act.

Internet Access

The OIG can be accessed via the World Wide Web. The OIG internet address is www.ftc.gov/oig/oighome.htm. A visitor to the OIG home page can download any of the OIG's semiannual reports to Congress that are listed, the FY 1997 and FY 1998 CFO Act audits, and can browse through a list of audit reports, identifying those of interest and ordering them via an e-mail link to the OIG. In addition to this information resource about the OIG, visitors are also provided a link to other federal organizations and offices of inspector general.

Audit Resolution

As of the end of this reporting period, all OIG audit recommendations for reports issued in prior periods have been resolved. That is, management and the OIG have reached agreement on what actions need to be taken.

Review of Legislation

Section 4 (a) (2) of the IG Act authorizes the IG to review and comment on any proposed legislation or regulations relating to the agency or affecting the operations of the OIG. During this reporting period, the OIG reviewed and provided supporting comments to the PCIE legislative liaison on the Government Waste, Fraud & Error Reduction Act of 1999 (H.R. 436), passed by the House on February 24, 1999. The act requires IG's to review their agency's annual report to Congress on high value nontax debts, a report required by another provision of the legislation, and to make such recommendations as are necessary to improve performance of the agency. The bill also requires IG's to periodically review and report to Congress on the agency's nontax debt collection management practices. The bill was referred to the Senate Committee on Governmental Affairs where it was pending at the end of this reporting period.

On another front, issues have been raised in two separate forums surrounding the issue of the level of independence of Designated Federal Entity (DFE) IGs. Although IGs have on occasion debated whether or not to seek legislation clarifying their statutory independence, the fact that certain questions have been raised outside the IG community indicates that additional attention needed to be given to IG independence issues.

First, in 1998 the Professional Ethics committee of the American Institute of Certified Public Accountants (AICPA) proposed a revision to its definition of Client Under ET Section 92. This revision would, for the first time, allow federal Inspectors General to issue audit opinions under Generally Accepted Auditing Standards (GAAS) as well as under Generally Accepted Government Auditing Standards (GAGAS). While statutory IGs have always been able to issue audit opinions under GAGAS, this proposed revision by the Ethics Committee was a positive step that appropriately recognized the level of independence provided IGs under the IG Act. However, under the AICPA revised definition of "Client," only Presidentially-appointed IGs would be defined as being independent auditors while designated federal entity (DFE) IGs, those IGs appointed by their agency head, would not fall under the revision. Consequently, 24 DFE IGs sent a letter to the AICPA asking that the committee consider some modified language that would allow for all federal statutory IGs to be covered by the new definition.

The second forum in which the independence of DFE IGs was recently raised was at a hearing before an Administrative Law Judge (ALJ) of the Federal Labor Relations Authority (FLRA) on an Unfair Labor Practice charge against the OIG of the National Labor Relations Board (NLRB). At issue was the alleged refusal of an investigator from the NLRB OIG to permit an employee to be represented by his union during an investigative interview. This very issue is pending a decision by the U.S. Supreme Court in FLRA v. National Aeronautics and Space Administration and National Aeronautics and Space Administration Office of Inspector General, 120 F.3d 1208 (11th Cir.1997), cert. granted, 119 S.Ct. 401(1998). Oral arguments were heard by the Court on March 23, 1999.

The ALJ who decided the NLRB case, however, concluded that his decision was not necessarily dependent on the outcome of the NASA case by the Supreme Court as the ALJ observed that the NLRB case involved an agency-head appointed IG, while the NASA case involved a Presidentially-appointed IG. The ALJ went on to state that because a DFE IG serves at the pleasure of the agency head and because of the agency's role in establishing the OIG's budget a DFE IG appears to have somewhat less independent than a Presidentially-appointed IG.

DFE IGs have long held that the IG Act Amendments of 1988 was intended to establish OIGs in designated federal entities that would be both independent in fact and perceived by exterior parties as such. Consequently, the DFE community has resolved to become more involved in working with Congress to address issues of independence.

Contacting the Office of Inspector General

Employees and the public are encouraged to contact the OIG regarding any incidents of possible fraud, waste or abuse occurring within FTC programs and operations. The OIG telephone number is (202) 326-2800. To report suspected wrongdoing, employees and the public should call the OIG's chief investigator directly on (202) 326-2581. A confidential or anonymous message can be left 24 hours a day.

The OIG is located in room 494 of the FTC Headquarters Building at 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. Office hours are from 8:30 a.m. to 6:00 p.m., Monday through Friday, except federal holidays.

Table I
Summary of Inspector General Reporting Requirements

Inspector General Act

Reference
Reporting Requirement
Page(s)
Section 4(a)(2) Review of legislation and regulations
10
Section 5(a)(l) Significant problems, abuses and deficiencies
3
Section 5(a)(2) Recommendations with respect to significant problems, abuses and deficiencies
3
Section 5(a)(3) Prior significant recommendations on which corrective actions have not been made
10
Section 5(a)(4) Matters referred to prosecutive authorities
8
Section 5(a)(5) Summary of instances where information was refused
9
Section 5(a)(6) List of audit reports by subject matter, showing dollar value of questioned costs and funds put to better use
3
Section 5(a)(7) Summary of each particularly significant report
1
Section 5(a)(8) Statistical tables showing number of reports and dollar value of questioned costs
13
Section 5(a)(9) Statistical tables showing number of reports and dollar value of recommendations that funds be put to better use
14
Section 5(a)(10) Summary of each audit issued before this reporting period for which no management decision was made by the end of the reporting period
10
Section 5(a)(11) Significant revised management decisions
9
Section 5(a)(12) Significant management decisions with which the Inspector General disagrees
9

TABLE II
Inspector General Issued Reports with Questioned Costs

 

 

Number

Dollar Value
(in thousands)

Questioned
Costs
Unsupported
Costs
A. For which no management decision has been made by the commencement of the reporting period
0
0
0
 
B. Which were issued during the reporting period
0
0
0
Subtotals (A + B)
0
0
0
C. For which a management decision was made during the reporting period
0
0
0
(i) dollar value of disallowed costs
0
0
0
(ii) dollar value of cost not disallowed
0
0
0
D. For which no management decision was made by the end of the reporting period
0
0
0
Reports for which no management decision was made within six months of issuance
0
0
0

 

TABLE III
Inspector General Issued Reports
with Recommendations that Funds Be Put to Better Use

 

 
Number
Dollar Value
(in thousands)
A. For which no management decision has been made by the commencement of the reporting period
0
0
 
B. Which were issued during this reporting period
1
$ 222,000
 
C. For which a management decision was made during the reporting period
1
$ 222,000
 
(i) dollar value of recommendations that were agreed to by management
1
$ 222,000
 
- based on proposed management action
1
$ 222,000
 
- based on proposed legislative action
0
0
 
(ii) dollar value of recommendations that were not agreed to by management
0
0
 
D. For which no management decision has been made by the end of the reporting period
0
0
 
Reports for which no management decision was made within six months of issuance
0
0
 

1. As previously mentioned, an OIG recommendation will result in recurring additional interest earnings of approximately $32,000 annually, depending on the amounts and collection rates of court ordered judgments. This amount, combined with $190,000 in funds put to better use identified above constitute the OIG's $222,000 of funds put to better use appearing in Table III of this report.